CP Foods’ Thai takeaway delivers for Melbourne couple

Konfir Kabo and Monica Lim in the first 1000 Wat Thai restaurant in Melbourne. The CP Foods conglomerate hopes the restaurant will be the first of a network of 100 stores within 5 years.
Photo: Patrick Scala/Getty Images

Agricultural giant Charoen Pokphand Foods, Thailand’s fifth-largest company by revenue, has partnered with a husband-and-wife team owning just two Melbourne noodle bars to roll out a chain of quick-service Thai restaurants that it plans to expand into a chain of 100 nationally within five years.

CP Foods started as a seed shop in Bangkok’s Chinatown in 1921 and was China’s first foreign investor when Deng Xiopeng opened the country in 1979. The world’s largest manufacturer of animal feed and second-largest producer of swine, is only now ramping up a fast-food business that makes up 3 per cent of revenue, but which the company wants to account for 10 per cent of the total within a decade.

“We’re one of the few food companies that have full integration," CP Foods deputy chief executive
Pisit Ohmpornnuwat
said on Monday.

“We have the opportunity now to go from (animal) feed all the way through to the restaurant."

Quick service retail gives the company another outlet for its processed food, such as the CP brand sold through Costco, which already accounts for about 12 per cent of revenue. Through this experience, the company already knows what sells in Australia.

“Doing frozen ready-made meals – exporting it, importing it, clearing it, getting a retail environment on it, getting the end customer - is even harder in some senses, than running a restaurant, because (with grocery retail) it’s all frozen and you’ve got to keep the quality all the way until you have a fantastic experience at the end," Mr Pisit said.

CP Foods is part of a family-controlled conglomerate, CP Group. Chairman
Dhanin Chearavanont
has an estimated $US12.3 billion fortune and his three brothers each have an estimated fortune worth more than $US2 billion ($2.1 billion), according to Bloomberg.

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Mr Pisit shrugged off the apparent size mismatch with his local partner.

“Sometimes you will work with a larger company and they will do what they want to do because they think they know better," he said through an interpreter. “It’s maybe not a 50-50 partnership, even though money-wise it may be. We want someone who . . . has a real working-together relationship."

Mr Pisit said he trusted Mr Kabo and Ms Lim to do the job.

“I think we have good partners. They are very enthusiastic."

Australia has no shortage of Asian restaurants, but there are few ­large-scale, quick-service chains – and none that can replicate the product with the consistency of a brand such as McDonald’s, Ms Lim said.

CP Foods will shoulder most of the $2.5 million the joint venture will spend over the next two years building an additional five company-owned outlets in Victoria and NSW, she said. Once the business is right, they will start franchising and within five years they hope to have 100 stores in a network that includes Queensland and WA.

Mr Kabo, who runs a Melbourne law firm, and Ms Lim started their Ramen Ya business six years ago.

In 2011 they were introduced to CP Foods’ new Australian head, Richard Lovell and started talking business.

“I like to meet people," Mr Kabo said.

Australia is the next step in a push that started in Singapore – where CP Foods has two outlets – in 2012 and expanded to the UK last year, with the acquisition of the 14-outlet Chozen Noodle chain. Australia is a stepping stone to gain experience for the company’s next big push, the US market.

That move could come in the next two years.

“This is a baby at the moment, but we hope it can grow into a giant baby," Ms Lim said.

Mr Pisit said he wasn’t concerned that allegations of slave labour in the production of fishmeal could damage the image of the company – the world’s largest prawn farmer - in Australia. CP Foods says it pays a premium to buy fishmeal from certified producers.

“We’re not doing anything wrong."

Separately, CP Foods, which last year exported 4000 tonnes of beef, chicken, lamb and pork from Australia, was interested in owning local production assets – particularly pork – but prices were too high, Mr Pisit said.

CP Foods ran the ruler over poultry business Inghams but decided it was too expensive. Inghams was bought by TPG last March for $880 million.

“In Australia, the land, the resources are fantastic for agriculture," he said. “The only thing is the costs. Right now, the costs are a little bit too high."

Paul Jensz, an agriculture analyst with consultancy PAC Partners, said that farming or processing assets not close to transport links could appear expensive compared with equivalent assets in Africa or Eastern Europe.